The Societal Foundations of National Competitiveness

Seven leading societal characteristics are associated with national competitive success

• These are national ambition and will, unified national identity, shared opportunity, an active state, effective institutions, a learning and adapting society, and competitive diversity and pluralism.
• There is some causal relationship between these seven characteristics and competitive outcomes in most cases studies the authors examined.

A prudent balance within each of these characteristics is important

• Factors such as national ambition or pluralism can become competitive handicaps when pushed to an extreme.
• Some of the characteristics harbor greater risk than others in this regard: Excessive national ambition and will is more dangerous than excessive shared opportunity. But all of them carry some danger when thrown out of balance.

A specific set of factors other than societal characteristics helps determine national competitive standing

• These include membership in networks of trade and exchange of ideas.
• It is often the interaction of these nonsocietal factors with the qualities of a nation—the ways in which its character matches or falls out of alignment with the demands of the moment—that determines national fates.

Lasting competitive advantage derives from positive-feedback synergies among the seven nominated societal characteristics

• It is these blended, interactive effects, creating competitive wholes greater than the sum of their parts, that distinguish the strongest and most competitive nations of each era.
• Nations whose competitive standing deteriorates tend to manifest weakness in many factors that compound: Competitive failure typically results from a negative-feedback loop of some kind, in the same way that success derives from a positive-feedback loop.

One recipe for national competitive advantage was most consistently associated with success, the Renaissance spirit

• Competitive societies tend to be open, tolerant, full of intellectual energy and commitment to learning; they have a powerful sense of their own role in the world and a sense of mission or will; they almost always benefit from strong public and private institutions, as well as a state apparatus that actively promotes advantage; and they embody a pluralistic clash of ideas and an ability of people from many backgrounds to offer their talents and succeed.